Advertising Age_ the Principles of Advertising and MarkCommunication at Work - Esther Thorson & Margaret Duffy

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Advertising AgeThe Principles of Advertising and Marketing Communication at Work

Esther Thorson Margaret DuffyUniversity of Missouri University of Missouri

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Advertising Age: The Principles of Advertising and Marketing Communication at Work, First Edition

Esther Thorson and Margaret Duffy

Vice President of Editorial, Business: Jack W. Calhoun

Publisher: Erin Joyner

Executive Editor: Mike Roche

Developmental Editor: Daniel Noguera

Marketing Manager: Gretchen Swann

Senior Marketing Communications Manager: Jim Overly

Production Manager: Jennifer Ziegler

Senior Rights Acquisition Specialist: Deanna Ettinger

Media Editor: John Rich

Buyer, Frontlist: Miranda Klapper

Senior Art Director: Stacy Jenkins Shirley

Content Project Management: PreMediaGlobal

Production House/Compositor: PreMediaGlobal

Internal Designer: PreMediaGlobal

Cover Designer: Oliver Munday

Cover Image: iStock Photo

Printed in the United States of America 1 2 3 4 5 6 7 15 14 13 12 11



About the Authors x

Foreword by Rance Crain xi

Acknowledgments xii

Preface xiv

Chapter 1 What Is Advertising and What New Forms Is It Taking? 1

So Just What Is Advertising? 2Advertising and the Rest of the Promotional Toolbox 4A Sampling of Advertising Innovations 4

Devices as New Media Channels 4Social Networks 6Twitter 6Online Video Ads 6

Advertising Networks and Exchanges 7New Ways to Target the Right Consumer with the Right Message 7

Behavioral Targeting 7Search Advertising 8

Where Next? 9Notes 9Articles 9

Chapter 2 Business Structures in the Advertising Industry 11

Advertising Agencies 12Advertisers 13

Relative Importance of Public Relations and Advertising 14Relationships between Advertising Agencies and Advertisers 14

Media 15Agencies, Advertisers, and Media 16

Articles 1 6

Chapter 3 Important Times in Advertising History 19

Profound Moments in Advertising History and What We Can Learn from Them 20A Wild Decade: 20002010 20Recessions and Advertising 20The Great Depression and Advertising 21Birth of Great Products 21

CONTENTS

iv



New Ways to Do Things 22Why Well-Advertised Brands Get Stuck in Your Mind Forever 22Hitting the Advertising Jackpot 22History through Biography 23

Notes 24Articles 2 4

Chapter 4 Ethical and Regulatory Contexts of Advertising 25

Ethical Challenges for Advertising 26Questionable Taste 26Stereotyping Women 27Does Political Attack Advertising Make People Cynical about Politics? 27Invasion of Consumer Privacy 28

Regulation and Self-Regulation of Advertising 30Transparency about Brand Endorsements 30Protection from Phone Call Harassment 30

Facilitating Positive Behavior 30Advertising: The Good, the Bad, and the Regulated 31

Notes 3 1Articles 3 1

Chapter 5 Theory about How Advertising Works 33

Hierarchy Models 34Additional Persuasion Theories 35Fiber One 37Theories for the Digital Age 38


Chapter 6

Segmentation, Brand Positioning, and Defining the Brand Value Proposition 41

Why Segmentation Is So Critical 41Demographics: The Simplest Segmentation Approach 42Psychographic Segmenting 42Segmenting by Generation 44Back to Macys 45Getting Segmentation Right 46Segmentation and the Problems of Privacy and Vulnerable Audiences 46Positioning and Brand Value Propositions 47


CONTENTS v



vi CONTENTS

Chapter 7 Research: The Magic Ingredient in Effective Advertising 49

So How Much Advertising Is Wasted? 49New Research Methods 51

Shopper Data 51Text Mining 51Buzz Tracking 51In-Store Behavior Monitoring 52Wiki Sites 52On-the-Fly Research 53

New Metrics of Advertising Impact 53Research in a Strapped Economy 54Are There General Research Truths from Advertising Research? 54

Note 5 5Articles 5 5

Chapter 8 Advertising and Promotion Management and Planning 57

Putting Together a Plan 60Notes 6 4Articles 6 4

Chapter 9 Advertising PlanningAn International Perspective 65

Break Me Off a Piece of That Soy-Sauce Bar 65Go Global or Go Local? Research and Local Knowledge Matter 67Management Matters 68Its Not about You 68A Global Consumer in Our Future? 69


Chapter 10 The Creative Strategy of Advertising Messages 75

Do Real Men Drink Diet Soda? 75Creative Strategy 75

CareerBuilder versus Monster 77Battle of the Travel Sites 78Creative Strategy for Issue-Based Advertising 79Big Ideas and Creative Strategies 79Caffeine 79

Articles 8 0



CONTENTS vii

Chapter 11

Telling a Story That Showcases the Creative Strategy: Creative Advertising Executions 81

From Creative Brief to Commercials 81Message Creativity or Creativity in the Selection of the Medium? 83Does the Creative in an Ad Have to Be about the Product? 84Advertising Appeals: A Potpourri 85Nikes Greatest Ad Ever 85Old Spice Humor 85Sex for All Kinds of Products 86Smoking, Fear, and Disgust 86Does Prize-Winning Advertising Sell Effectively? 86

Note 8 7Articles 8 7

Chapter 12 Creative Copywriting 89

Research versus Creativity 90Strategy 92Features and Benefits 92Creativity in 140 Characters? 93Whats Creative? 94On Advertising and Promotional Creativity 94


Chapter 13 Creative Design and Visuals 97

Persuasion and Visuals 98The Creative Brief: A Template for Teamwork 100One Device to Rule Them All? 103


Chapter 14 Media Planning 105

Are Media the New Creative? 106Measuring Media 107Paid Media Still Dominate 109Why Do People Choose Different Media? 109Individual Differences 112ApertureThe Perfect Opening 112Voice 112Media Features 112




x

ABOUT THE AUTHORS

Esther ThorsonAssociate Dean for Graduate Studies and Research and Director of Research, Reynolds Journalism Institute School of Journalism, University of Missouri

Esther Thorson, Ph. D., has published extensively on the news industry, advertising, news effects and health communication Along with professors Hari Sridhar and Murali Mantrala she has developed econometric models that link newspaper budget management with revenue/profit patterns. Her scholarly work has won a variety of research and writing awards and she has advised nearly 40 doctoral dissertations. She applies research, both hers and that of her colleagues, in newsrooms and advertising agencies across the US and abroad. She serves on an extensive list of journal editorial boards. Her latest books are (with David Schumann) Internet Advertising: Theory and Research (Lawrence Erlbaum, 2007) and (with Jerry Parker), Health Communication in the New Media Landscape (Springer, 2008).

Margaret DuffyChair, Strategic Communication Faculty School of Journalism, University of Missouri

Margaret Duffy, Ph. D., chairs the strategic communication faculty at the Missouri school of Journalism. She has extensive professional experience, including serving as an executive for GTE (Verizon) in marketing, advertising and public relations. Her research focuses on new and interactive media, especially with regard to advertising and the news. She is the co-developer of the Media Choice Model and the Health Communication Media Choice Model. Her fellowship at the Donald W. Reynolds Journalism Institute investigated youth advertising, news and media habits. She consults with clients as diverse as the U.S. Army and the Estee Lauder Corporation and has presented research and conducted training with agencies, universities and news groups in the United States, Italy, China, the United King-dom, Thailand, Australia, and South Africa.



New Ways to Target the Right Consumer with the Right Message 7

sponsorships are used in PBS television programming. YouTube is also experimenting with kinds of choices that people can make among video ads and promoted videos, which are also advertisements. There is still much experimenting to be done to figure out how to ef-fectively move the television commercial to the online environment.

Advertising Networks and ExchangesMagazines, newspapers, blog sites, and all kinds of other online publications offer display space to advertisers, with much of that space being filled by local advertisements. But in many of these publications, there is significant space left vacant. Advertising networks developed to aggregate remnant space and sell it to advertisers. Most ad networks have contracts with online publications to sell their space. This space is often, but not always, less expensive than space sold by the publication itself. As we see in Ad Networks and Exchanges 101, the degree of audience targeting that the advertising networks offer var-ies from almost none to very sophisticated delivery of advertising to those with particular interests indicated either by where in the publication the advertising is located (e.g., sports versus home styles) or by behavioral targeting enabled by data on where in the sites peo-ple have spent time (see below) (A7; http://adage.com/adnetworkexchangeguide10/article?article_id=143310). Confused by Where to Click? explains in more detail how advertising exchanges work (A8; http://adage.com/adnetworkexchangeguide/article?article_id=126222). The best analogy for them is the stock market, where all avail-able online space is traded in real time by advertisers and publishers. Advertisers can see the prices that others bid for space and respond accordingly. One of the best known of these exchanges was started in 2007 by DoubleClick, a company started in 1996 and bought by Google for $3.1 billion in 2008.

Networks and exchanges are important to advertising because they are entirely new ways for advertisers to get their ads into media channels. These two approaches to media handling will only become more important as online commerce and publishing become more dominant.

New Ways to Target the Right Consumer with the Right MessageBehavioral TargetingBehavioral targeting uses data about peoples online behavior to determine what advertising they will be exposed to. There are lots of ways to do behavioral targeting. It can be done within an individual publication, which will place a cookie on visitors computers, and then use data from that cookie to see what part of the publication is most visited. Then the publication sells that information to advertisers who want to reach pet owners, sports fans, home remodelers, or any other kind of behavioral pattern linked with what advertisers are selling.

As we see in Holy Grail of Targeting, more sophisticated behavioral targeting goes beyond peoples behavior on a single site to track all of their online behavior, and often these data can be further refined for connecting online behavior with information from credit card purchases, home ownership information, census details, and a wide vari-ety of other information about individual consumers (A9; http://adage.com/digital/article?article_id=142903). As the article points out, while this level of behavioral target-ing is truly the Holy Grail for advertisers, concerns about invasion of consumer privacy have to be considered.



8 CHAPTER 1 What Is Advertising and What New Forms Is It Taking?

Holy Grail of Targeting Is Fuel for Privacy BattleMelding of Online and Offline Info Is Delicate Dance for Marketers, Could Raise Red Flag to Regulators

What do marketers know about you? Well, quite a lot, and this article examines the fine line that marketers are treading in gathering consumer data in order to better target con-sumers. The author explains that companies gather offline data, or information avail-able beyond monitoring a persons behavior. This can include easily available information such as an individuals income, credit rating purchase history, number of children, and home value. Marketers then combine that information with an individuals online behav-ior to gain consumer preference information thats considered revolutionary.

The article points out, however, that some regulators and members of Congress consider this revolutionary as wellbut not in a good way. Alarmed by the possibilities for invasion of privacy, many interested parties are proposing regulation that could ham-string marketers use of these data. Although marketers using behavior techniques claim that they remove data that identify individual consumers, regulators have doubts about the security of the information and the intentions of the marketers.

Other consumer watchdog groups argue that people unwittingly give up personal information such as their birthdates and names of friends and families. In addition, their search and purchase behaviors can reveal information about highly personal matters such health conditions or sexual preferences. In addition, since firms are able to make money from individuals information, other critics argue that consumers should at least receive compensation for it.

Finally, with the massive growth of social networks featuring extensive personal pref-erences linked to friends and others, marketers are mining that category of online behav-ior. Bottom line? If marketers want to continue to gather this type of data, they will have to very carefully consider privacy issues and the protection of consumers.

We will look further at the conflict of privacy and behavioral targeting in Chapter 4. Behavioral targeting has the potential to provide far more accurate targeting than advertis-ers have ever had previously.

Search AdvertisingAdvertising that greets you as you do a search for anything is called search advertising. It is a subactivity of search marketing, the topic of Abbey Klassens article (A10; http://adage.com/digital/article?article_id=140083). The statistics about search advertising are im-pressive. Nine out of ten advertisers use what is called organic search optimization, which means that they carefully craft their website language to increase the likelihood that it will pop up high in searches. Fully 70 percent of advertisers use paid search, which means that they pay search engines such as Google and Yahoo to place their websites at the top of the search list delivered to consumers. Search ability has made consumers much more power-ful in finding the information they want, when they want it. Some argue that search has robbed advertising of a lot of its power to bring product and idea information to people. But, on the other hand, search advertising has the advantage of being delivered to people who have self-selected themselves as part of the target market. It seems clear that search advertising has damaged the link between publications and advertising, because publica-tions are no longer needed. The State of Search Marketing: 2009 provides an encyclo-pedic overview of how search marketing works in general and how search advertising fits into that total picture. (A10)



11

Business Structures in the Advertising Industry

2CHAPTER

In season one of Mad Men, the hit AMC television series about the advertising business in the 1950s, Roger Sterling, advertising agency principal, says to creative but troubled advertising genius Don Draper, You know what my father used to say? Being with a client is like being in a marriage. Sometimes you get into it for the wrong reasons, and eventually they hit you in the face. Judging from the exodus of cre-ative executives from American advertising agencies in 2010, the same might be said for the relationships between agencies and many of their creative stars (A1; http://adage.com/article?article_id=145979).

In the past few years, such creative executives as Gerry Graf of Saatchi, Ty Montague and Rosemarie Ryan of JWT, Eric Silver of DDB New York, as well as a number of others left high-paying, high-visibility advertis-ing agencies to strike out on their own, sometimes even to try out new businesses.

The large advertising agency has long been the centerpiece for what adver-tising means, for great advertising campaigns, and for the veneer of glamour, ex-citement, and fast-lane living. So why are so many high-placed advertising creative executives jumping ship? As well see in this chapter, advertising may be as Kevin Roddy, chief creative officer at Bartle Bogle Hegarty (BBH) New York, says, getting harder (p. 28 in A1).

Advertising agencies are not just challenged by the loss of some of their star creative people. Although advertising agencies claim they are the trusted partners of advertis-ers and their brands, that clientagency relationship is often troubled. For example, in one week in June 2010, Chevrolet, Cadillac, and Mazda all fired their agencies and put their accounts up for grabs$600 million of advertising. The CEO of BBH first heard about his agencys firing from reading about it in Advertising Age (A2; http://adage.com/agencynews/article?article_id=144700).

In this chapter we look at advertising agencies, advertisers, and the media to try to understand some of the complexities of their structures and how they relate to each other.

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12 CHAPTER 2 Business Structures in the Advertising Industry

Advertising AgenciesMany of you will spend at least part of your career in one or more advertising, media, PR or marketing communication agencies. Most advertising and promotion originates in agencies. Since 1944, Advertising Age has tracked the worlds agenciestheir consoli-dations and breakups, their total expenditures on media, and their client lists. In the late 1800s when the first advertising agencies appeared, they were small and most started with a single individual. During the 1900s agencies came to employ hundreds and provide a full spectrum of servicescreating advertising, managing brand accounts, researching con-sumers, and buying media placements for the advertising. By 2000 there had been huge mergers of individual advertising agencies, with Dentsu, a Japanese-based company, the largest. Agency Report notes that Dentsu is now the fifth largest company, with WPP, Omnicom, Publicis, and Interpublic heading the list (A3; http://adage.com/agencynews/article?article_id=143467). Although advertising agencies started in the United States, three of the top five companies are now headquartered abroad. In the United States, the top five agencies are McCann Erickson, BBDO, JWT, Y&R, and Leo Burnett, although each of these agencies belongs to one of the five top worldwide agencies.

The year 2009 was a bad one for agencies, with U.S. revenue falling 7.5 percent. That may not sound like a lot, but in terms of revenues and the financial health of the agencies, its huge. All of the four kinds of agencies lost revenues: traditional agencies, media agen-cies, direct customer agencies, and public relations agencies. The only area of advertising that rose was digital, and the change was very small: a half percent.

As a student of advertising and marketing communication, you probably ask yourself, what makes working at an agency fun and fulfilling? Lots of people have tried to figure out just what makes agencies successful. Most agree that ad agencies have personalities and that you can see them reflected in the advertising that they do. Another way to look at life at ad agencies is in terms of their culture. Agency culture is crucial for attracting talented professionals who can produce great ads (A4; http://adage.com/article?article_id=143477). Many argue the importance of treating ad professionals well. Check out the list of things that some agencies are doing to make sure their culture is a winning one.

In Adland, the Best Culture Lures the Best TalentAs Hiring Freezes Thaw, Expect Fun, Contemporary Agencies to Have an Easy Time Attracting and Retaining Quality Staffers

As a student of advertising and marketing communication, youve probably thought about what its like to work in communication at an agency, a corporate office, or perhaps for a charitable organization. This article can give you some ideas about what to expect. One of the most important things for you to consider is the culture of the organization you may join. Youll not only want good working conditions, good pay, solid and ethical management, and other characteristicsyoull want a good fit with your personality and work style.

The article points out that the most successful agencies have a defined culture that stays true to the vision of the founders of the agency. Some corporate cultures may be buttoned up, structured and formal and that is often a very successful approach and may be where youre happiest. Other corporate cultures are successful with a more organic, informal and unstructured style. Theres no right corporate culture, but theres likely a right culture for you.

Heres a summary of some tactics agencies use to foster the kinds of cultures they think help them thrive.



Advertisers 13

1. An e-newsletter that offers fun and irreverent commentary about the agency and the business.

2. A field trip to exotic locations like Tokyo that inspire staffers and foster team spirit.

3. Loyalty rewards that offer employees with 20+ years of service $10,000 to use on a vacation anywhere in the world. Fellow employees throw a bon voyage party to send the traveler on the way.

4. Good deeds. Some agencies get involved in grass roots charitable efforts to help their communities such as getting out the vote or adopting schools.

5. Job enrichment. Some agencies offer special classes and workshops on topics like technology and innovation to help employee ramp up their skills and prepare for pro-motions and new challenges.

6. Personal enrichment. Other organizations offer tuition for classes that arent even linked to advertising or marketing. Rather, employees learn diverse skills like acting or driving.

7. Change of venue. One of the worlds biggest agencies, Digitas, offers its 3000 world-wide employees the opportunity to work in one of its 33 international offices. As part of the deal, the employee records her or his experiences to share with others through a video time capsule.

8. No secrets. Some agencies conduct annual meetings that bring all employees up to date on the organizations performance, its outlook for the coming year, and the role of each employee in its success.

9. Talent showcase. New Yorks Deutsch puts on a talent show for employees to compete for prizes and glory. This kind of thing is typical of the creative competition that ad-vertising professionals enjoy.

10. Creative inspiration. One New York agency brings talent of all kinds into the office during working hours, including forensics experts and Juilliard music professors.

Regardless of the strategy, you can see that different organizations have different styles and cultures and youll want to land in one thats right for you.

AdvertisersAdvertising Age has been tracking the advertising spending of U.S. advertisers since 1956. As noted above, 2009 showed the highest drop in that spending in the last fifty-three years. Of the top ten advertisers (Procter & Gamble, Verizon, AT&T, General Motors, Pfizer, Johnson & Johnson, Walt Disney, Time Warner, LOreal, and Kraft), all but Pfizer and Kraft reduced their advertising spending. But the eleventh top advertiser, Walmart, increased its spending by 14 percentclearly trying to grab market shares during the downturnand it had a 1.1 percent increase in sales, even though retail sales nationally fell 2.1 per-cent. So spending more in a downturn paid off for Walmart. It also paid off for Pfizer. In fact, of the twenty-six top advertisers who increased or maintained their spending in 2009, 70 percent increased sales. So it looks as though spending during a downturn IS a good idea (A5; http://adage.com/article?article_id=144555).

Arguably the most precious resource corporations have is their brands. Traditionally, the key individual for a brand in corporations is the brand manager. The challenge for brand man-agers is in the digital world, where changes occur with lightning speed and where consum-ers often take over the conversation about brands, even to the point of producing their own brand ads. Recently, Forrester Research, a major analyst of Americas consumers, suggested that brand managers become brand advocates. Along with the name change, brand advocates will no longer stick with yearly budgeting of messages and media for the brand. Instead they will



16 CHAPTER 2 Business Structures in the Advertising Industry

channels by which to bring advertising to its target audiences. Once a year Advertising Age reviews the top one hundred media companies, with the most recent review in 2009 (A11; http://adage.com/article?article_id=141212). Just as we saw advertisers spending less on advertising, and advertising agencies making less money, revenues sharply declined for media companies in 2009. Eleven of the top one hundred media companies entered bank-ruptcy, although six of them survived and emerged from bankruptcy court. Newspapers showed the worst drop in revenues, twice that of the second worst, magazines. The winners during this worst year of the downturn were not digital, as we might have expected, but cable. Fronting cables success was Fox News, up nearly 23 percent; CNN, up 15 percent; Fox Sports Network, up nearly 13 percent; and number-one ranked ESPN, up more than 9 percent. These are media properties that have found their loyal audiences and continue to build audience.

In the media report for 2009, be sure to notice the top twenty social networking sites. How many of these did you visit last week? It is interesting to note that none of them, not even Facebook, have ever made a profit!

As we saw in the analysis of advertising agency problems, many media are attempt-ing to become producers of advertising. Perhaps even more threatening, however, are the large search companies attempting to become media. Columnist Simon Dumenco reviews Googles business efforts aimed at allowing it to obtain greater advertising revenues (A12; http://adage.com/mediaworks/article?article_id=141250). Of course, Google now owns YouTube and certainly has been trying to figure out how to connect advertising with You-Tube more effectively, so technically Google already is a media company. But in attempting to buy Yelp, at which it failed, Google indicated a strong desire to create a news or direc-tory site that would carry advertising. Google and Yahoo have actually become not only media, but also advertising and marketing companies.

Ag Age considered the question of the future of media companies (A13; http://adage.com/columns/article?article_id=140091). Ironically, Bloom suggests that the successful media company will be more like a marketing company. He suggests that advertisers and agencies want to surround their messages with specific audiences who will welcome those messages. This reflects the new importance of advertising context, programming, or con-tent that greatly increases the likelihood that the advertising makes sense with its presence.

Agencies, Advertisers, and Media What is clear from the readings in this chapter is that the customization, personalization, interactivity, and targeted delivery that have become possible with the Internet, social net-works, smartphone apps, and so on have fundamentally changed the relationships among agencies, advertisers, and media. To operate well in the digital world, the functions of the three industry structures need to be better coordinated, faster on their feet, and willing to innovate at the same rate as new content, new devices, and new features are invented. In the next few years, we will see whether the search companies can actually continue to suc-cessfully become media and advertising agencies in and of themselves.

Articles(A1) Matthew Creamer. Creative Exodus in Adland: Its Just Not Fun Anymore. Published Sep-

tember 20, 2010. Available at: http://adage.com/article?article_id=145979(A2) Jeremy Mullman. Cadillac, Chrysler, Mazda Accounts Spin Out at Once. Published June 28,

2010. Available at: http://adage.com/agencynews/article?article_id=144700



Articles 17

(A3) Bradley Johnson. Agency Report: Revenue Slumps 7.5%, Jobs at 16-Year Low. Published April 26, 2010. Available at: http://adage.com/agencynews/article?article_id=143467

(A4) Rupal Parekh. In Adland, the Best Culture Lures the Best Talent. Published April 26, 2010. Available at: http://adage.com/article?article_id=143477

(A5) Bradley Johnson. Top 100 Outlays Plunge 10% But Defying Spend Trend Can Pay Off. Pub-lished June 21, 2010. Available at: http://adage.com/article?article_id=144555

(A6) Jack Neff. Why Its Time to Do Away with the Brand Manager. Published October 12, 2009. Available at: http://adage.com/cmostrategy/article?article_id=139593

(A7) Michael Bush. How PR Chiefs Have Shifted toward Center of Marketing Depart-ments. Published September 21, 2009. Available at: http://adage.com/cmostrategy/article?article_id=139140

(A8) Jeremy Mullman. Despite ROI Chatter, Marketers Still Pay Shops Same Old Way. Published May 3, 2010. Available at: http://adage.com/article?article_id=143644

(A9) Wayne Arnold. Stop Being an Agency and Start Being an Agent of Change. Published Sep-tember 7, 2009. Available at: http://adage.com/article?article_id=138795

(A10) How to Save the Troubled Agency-Marketer Relationship. Published April 26, 2010. Avail-able at: http://adage.com/article?article_id=143508

(A11) 2009 Set to Show First Revenue Decline for Nations Top 100 Media Cos. Published Decem-ber 28, 2009. Available at: http://adage.com/article?article_id=141212

(A12) Simon Dumenco. In Trying to Buy Yelp, Google Is Becoming . . . Yep, a Media Company. Pub-lished January 4, 2010. Available at: http://adage.com/mediaworks/article?article_id=141250

(A13) Jonah Bloom. What Will a Successful Media Company Look Like in the Future? Published November 2, 2009. Available at: http://adage.com/columns/article?article_id=140091



19

Important Times in Advertising History 3

CHAPTER

In the 1984 Super Bowl, the Los Angeles Raiders beat the Washington Redskins 389 in Tampa. Although a number of that years commercials were for comput-ers, the only one anyone remembers was Apples ad 1984, which introduced the Macintosh computer. Producer Ridley Scott (Blade Runner and Thelma and Louise) created the $800,000 commercial, which ran in a $1 million time slot during the Super Bowl. In 2004, USA Today reporter Kevin Maney, who called the commercial a watershed event, described it in the following way:

A woman with blond hair and a get-up like Olivia Newton-John mightve worn in her Physical video, runs into a sci-fi setting packed with bald human drones who are listening to their leader address them on a giant TV. The aerobics woman, chased by storm trooper types, throws a sledgehammer through the screen. (1)

Although it was only aired once, 1984 was credited with the subsequent enormous sales success of the Macintosh. As we read in the Apple Computer history story from Advertising Age, the commercial also won the Grand Prix at the Cannes International Advertising Festival, and the advertising agency responsible for it, Chiat/Day, was named agency of the decade by Advertising Age (A1; http://adage.com/article?article_id=98322). But in the more than twenty-five years since the commercial ran, many argue that the commercial not only sold millions of computers, it actually set the stage for Apples business orien-tation from then until now. Just as 1984 represented Apple fighting against the Big Brother IBM, subsequent campaigns have continued to represent the company as fighting off big guy evildoersonly the competition has changed. After IBM, Big Brother was Microsoft.

First with the iPod and iTunes, and then with the iPad, the company contin-ues to innovate toward thinking differently (and better) than the competition. Most agree that Apples advertising since then, although good, has never again been able to capture the entire meaning of a product and a company in a single commercial. This fact makes 1984 one of the most revered commercials in advertising history.



20 CHAPTER 3 Important Times in Advertising History

Profound Moments in Advertising History and What We Can Learn from Them

This chapter looks at some high and low points in advertising history. These events are stories about advertisements themselves, of products, of advertising leaders, and of com-panies. The events themselves are interesting, but they also give us insights about todays world of advertising and marketing communication. We begin by looking back at the first decade of this century.

A Wild Decade: 20002010The first ten years of the twenty-first century have brought revolutionary changes. As the old century ended, many of the businesses that dived into Internet ventures found they couldnt make money, and we had the dot-com bust where millions were won and lost, often in a matter of weeks. September 11, 2001, changed American life forever. Terrorism had seldom touched Americans, but after the attacks commercial flight became a trial and many events could trigger security alerts. Advertisers had to be alert to present advertising that was sensitive to the new realities of terrorist threats as well as avoiding stereotypical representations of ethnic groups.

As the new century moved forward, the Internet became commercialized; Facebook and MySpace were born, as were YouTube and Twitter as well as all kinds of other social networks. Smartphones became common and started to fill all kinds of mobile information needsemail, text messaging, and geographic-based advertising. E-readers actually gained readers, and in 2010 the iPad revolutionized smart devices with a full-color reader combin-ing many functions of smartphones and laptops. These changes all influenced advertising and meant that whole new categories of advertising were born: text-based advertising, advertising networks for placing advertising in remnant online sites, targeted advertis-ing, and advertising targeted to the behaviors of people online (A2; http://adage.com/article?article_id=141062).

As well see throughout this book, the changes that occurred in the last decade have had some of the greatest impacts on advertisingthe media in which its carried, its role compared with other promotional tools, its financial health, and what companies are the big players in the industry itself.

Recessions and AdvertisingToward the end of the decade, we were hit with a worldwide recession. Advertising was par-ticularly damaged. Ad Age reported that in the past thirty years, 2009 was first in which ad-vertising revenue from the top media companies fell (A3; http://adage.com/mediaworks/article?article_id=139445). More disturbing, eleven out of the top one hundred media com-panies entered bankruptcy. Not surprisingly, the hardest hit media were all print: six newspa-per companies, two magazine companies, and two Yellow Pages publishers. Even the online companies werent bright spotsTwitter, Facebook and YouTube had yet to make a profit. In fact, despite Facebooks immense popularity, its profit picture is unclear since its a private company (not traded on the stock market) thats not required to report its financial results.

Cable and satellite TV did relatively well in this time period. In fact, as this book goes to press, what can be said about advertising media is that the oldest formprintis clearly on a rapid descent, but few media companies have figured out how to make a profit on the Internet. Nevertheless, television continues its dominance. Where will advertising media



22 CHAPTER 3 Important Times in Advertising History

Most experts agree that advertising continues to be an essential tool when introducing new products, and all of the examples in this article reveal how powerful advertising can be. But as well see in subsequent chapters, competitors to advertisings role in the intro-duction of new products are on the horizon.

New Ways to Do Things Ad Age offered a dictionary of terms that are used routinely by advertising professionalsas well as by others in media and marketing (A6; http://adage.com/article?article_id=141058). As youll see in the article, these terms reveal big changes for how the media, marketing, and news are structured. In fact, most of these terms are relevant to what Harvard marketing professor Clayton Christensen called disruptive technologies. (2) Technologies that disrupt marketing and media provide new ways of doing business, targeting customers, and sell-ing brands. They are disruptive in the sense that they threaten the livelihood of traditional marketers and media professionals. The idea of the marketer as media is a good example. When companies can create their own websites and draw millions of customers to those sites, theyre able to spend less and less on traditional media. They skip the old media and go straight to the customer.

Crowdsourcing is another good example. Instead of relying on traditional research to determine what consumers want and need, Procter & Gamble creates sites for mothers to talk about using disposable diapers, for women to talk about coloring their hair, and for other consumers to talk about removing stains. As marketers observe people talking about how they use products, theyre able to figure out product changes and better ways to talk with consumers about their brands. As you look through the rest of the great ideas in this article, consider how each of them threatens traditional ways of doing advertising and making money from marketing.

Why Well-Advertised Brands Get Stuck in Your Mind ForeverAnother way to look at the history of advertising is by thinking about campaigns that pro-duced unforgettable images and effects. Ad Age reviewed the Walk winners from 2004 through 2008 and then offered twenty-six new candidates. (A7) What is the Walk? Each one has an iconic brand image, plus powerful and unique selling propositions. Its likely youll remember many of them. In Chapter 5, when we look at theories of how advertising works and in Chapter 12 about creative executions in advertising, we will look in more de-tail at what made these advertisements so successful in positioning their brands.

Hitting the Advertising JackpotEvery once in a while a brand sales concept hits pay dirt and a long-term campaignand lots and lots of salesare created. Again, our prime example is Apples Macintosh. Like 1984, these approaches break the mold of what most advertising looks like. Ad Ages re-view of ten great ideas offers some great examples: a vodka bottle that becomes the com-munication voice of the brand, a television commercial that runs once and sells millions of computers, a car that makes fun of its small size and funny shape, and a $35 invest-ment that created the logo on one of the worlds most successful sports shoe companies (A8; http://adage.com/cmostrategy/article?article_id=142090). Also check out a second list of ten advertising ideas for some more inspiringand sometimes amusingstories (A9; http://adage.com/cmostrategy/article?article_id=143873).



History through Biography 23

Ten Big Marketing Risks That Paid Off for BrandsLiodice Continues His Series by Looking at How Breaking Boundaries Helped These Companies Get Ahead

Advertising and marketing communication are exciting, fun and notably risky businesses and they have been throughout the professions history. To get consumers fleeting atten-tion, advertisers try to go beyond whats safe and they often push the margins of accepted practices, good sense and even good taste.

This article provides examples of advertisers who took big risks and reaped big rewards. This doesnt mean that advertisers should take chances just to stand out. Rather, they try to make good decisions based on both the art and science of persuasion. Its important to remember that theres a lot at stake in these decisions: clients can be lost, people can get fired and agencies can even go out of business. Sometimes, as in these examples, they hit the jackpot.

Eveready powers programming hours. Back in the 1920s, most radio advertising used the interrupt style to identify spon-sors and for station identificationnot too different from radio programming today. Eveready hit on the idea of sponsoring a whole show and invented a new type of advertising.American Tobacco spends millions to advertise Lucky Strike. In 1929, few people knew about the dangers of cigarettes. But Lucky Strike advertis-ing courted controversy anyway by positioning itself as a competitor to candy. They spent more than $12.3 million (equivalent to some $155 million today) to promote reach for a Lucky instead of a sweet, a campaign aimed at weight conscious women. The National Confectioners Association struck back with anti-smoking messages and finally the Federal Trade Commission investigated and ruled that cigarettes shouldnt be marketed as a weight loss product. Lucky Strike came back with Reach for a Lucky instead.Anheuser Busch kicks off stadium sponsorships. Few people can remember when private companies didnt sponsor sports venue. In 1953, A-B went after naming rights for Sportsmans Park, Home of the St. Louis Cardinals. They wanted to call it Budweiser Stadium but finally got the Commis-sioner of Baseball to approve Busch Stadium, and pioneered the concept of stadium sponsorships.Reeses Pieces picks up where M&Ms left off. The producers of a movie about an alien approached M&M candies about using the product in their new film but M&M passed on the opportunity. Hershey foods, maker of Reeses Pieces, said yes to the idea and the character of a little boy named Henry used the candy to entice the alien into his house. This product placement or integration paid off handsomely when the film E.T.: The Extra Terrestial became a hit and Reeses sales went to the stratosphere. Today, product integration is a major tactic for market-ers in hundreds of films.

History through BiographyAnother way to look at advertising history is by reading about advertising greats. Bill Bern-bach, founder of DDB (formerly Doyle, Dane, Bernbach) created and inspired advertising that broke the rules. He created Think Small for the Volkswagen Beetle, and We Try Harder for Avis car rental.



25

Ethical and Regulatory Contexts of Advertising

4CHAPTER

In April 2010, an explosion on the Deepwater Horizon BP oil platform killed eleven people. For the next three months, oil gushed into the Gulf of Mexico. It harmed sea life, ruined the fishing industry in the area, and stemmed the flow of tourists. BP, once considered an exemplary ethical corporation, faced not

only an environmental crisis but also a public relations crisis. (1) Its first set of commercials explaining how it was attempting to stop the flow

of oil and clean up the spill featured company CEO Tony Hayward. He promised that taxpayers wouldnt be paying the bill for the damage and apologized on behalf of BP. However, speaking off-the-cuff later to reporters in Louisiana, he also said, Theres no one who wants this over more than I do. I would like my life back.

Many interpreted Haywards remark as saying he was more concerned about his own life than those affected by the explosion. Later, he was photographed at-tending a sailing race, adding to public anger. Ad Age reported that the comment and the sailing race posed major problems for the companys public relations firm (A1; http://adage.com/article?article_id=144287).

Communicating about as explosive a topic as the BP oil spill raises serious ethical questions. Ad Age reported that in an online poll they conducted of public rela-tions professionals, 43 percent of three hundred respondents said they would not attempt an advertising campaign to handle the crisis because of ethical concerns. (A1) Michael Kempner, CEO of Interpublic Groups PR shop, MWW Group, said he would attempt a BP campaign, but I might consider it only on the condition that they would commit to total transparency and be an agent for change. I would also potentially work with them to provide true solutions to the residents of the Gulf Coast and major funding to repair the damage caused to lives, the environment and the economy. I would not work with them to cover up, spin or justify their past and current behavior.

Advertising and public relations often are used hand in hand when corpora-tions get into trouble. What are the ethics of trying to justify or ameliorate the harm a company has caused? Scholarly and professional literature offers advice about the right ways to deal with these occurrences. Truth and transparency have often emerged as the ethical and practical winners.

Advertising is only evil when it advertises evil things.

David Ogilvy



26 CHAPTER 4 Ethical and Regulatory Contexts of Advertising

Ethical Challenges for Advertising Many have argued that advertising often has negative effects on society. As Hovland and Wolburg point out in their book about advertising ethics, advertising is inherently con-troversial. (2) Most advertising historians claim that advertising developed hand in hand with a consumer culture. Just like any kind of communication message, advertising can contain falsities. In fact, it may contain true statements that are nevertheless misleading. (3) Advertising can promote what some consider the negative trait materialism or an excessive focus on buying and consuming material goods at the expense of human rela-tionships, citizenship and other activities. Advertising can lead to the use of dangerous products such as cigarettes or dangerous behaviors such as imitating reckless driving of automobiles as they are shown in commercials. Advertising has been accused of preying on vulnerable audiences such as children or those likely to become addicted to alcohol, gam-bling, or overeating. Advertising is often accused of stereotypingwomen, men, children, family relationships, minorities, really just about anything it depicts.

There are two areas that focus on determining whether advertising does have negative social impacts and if so how to lessen those impacts. One approach is the study of ad-vertising ethics. The other is regulatoryeither self-regulation from agencies, such as the Council of Better Business Bureaus or the National Advertising Review Board, or external governmental regulation, such as the Federal Trade Commission (FTC) or local and state regulatory agencies. For example, local government often regulates the size and placement of retail signs. In most states the Attorney Generals office deals with such problems as un-invited phone calls from firms selling products or services.

Advertising Age provides a rich picture of news and opinion about advertisings ethical and regulatory problems. In this section well look at examples of questionable taste, ste-reotyping women, the potentially poisonous effects of political advertising, and invasion of privacy. In later sections, we look at advertising regulation and examine examples in which advertising has been lauded for its social impact.

Questionable TasteAlthough rap artists and movies commonly make extensive use of profanity, in U.S. tele-vision programming, especially by the television networks during the early evening hours when children are likely to be watching, profanity is not allowed. For example, the Federal Communications Commission (FCC) specifically outlaws the use of a four-letter word that begins with F during these hours. But in the future, profanity, sex, and violence may become much more common in network fare. One of the barriers to these topics and language has been advertisers who fear offending the tastes of consumers (A2; http://adage.com/media-works/article?article_id=144159). Irate parents and offended consumers have boycotted brands, but this article suggests that advertisers are now more interested in associating them-selves with a large audience than worrying about angering a small group of consumers.

Swearing During Family Hour? Who Gives a $#*!CBS Has Little Concern About How Its Hottest New Sitcom Will Be Received, Despite Airing on Early Side

Actor and pitchman William Shatner can take a jokeand he can make a lot of money out of it, too. Widely mocked for his decades-old role as Captain Kirk, captain of the Starship Enterprise, he turned his notoriety into roles as an advertising spokesman and the star of a sitcom with an unsayable (on TV) name.



the likelihood that citizens will get involved enough to vote. Other research indicates at-tack ads turn voters off so they dont vote. Theres some research that suggests that the more attack advertising in a campaign, the more cynical citizens become about their own government, and certainly more cynical about all politicians. Rance Crain, Advertising Age editor, posits another interesting ideathat what Crain calls raucous political ad-vertising from both Democrats and Republicans damages citizen responses to nonpolitical advertising (A4; http://adage.com/columns/article?article_id=143198). He believes that angry political consumers are the same people who develop attitudes toward brands, and that anger rubs off on the industry as a whole. Crain further suggests that a number of large brand advertisers (e.g., Coke or Budweiser) are failing to provide high-quality adver-tising support for their brands, and instead are retreating to the Internet where they have less national visibility. In any case, its critical that researchers and professionals continue to research the potential connection between political advertising abuses and loss of trust in major brands. Even more important, its crucial that as a society we better understand the relationship between different types of political advertising and promotion and their effects on democratic processes.

In 1993, professors Annie Lang and Betsy Krueger published a study of Americans beliefs about political and brand advertising. (4) Surprisingly, most people thought that political advertising is regulated by the government. In fact, its protected by the First Amendment and not regulated at all. People also believed that brand advertising was not regulated when just the opposite is true. We also saw Rance Crains commentary about political advertising and its potential for fostering negativity toward advertising.

This is important because advertising is only effective when it is considered trust-worthy and believable by its audiences. Although the self-regulatory organizations try to encourage a positive reputation for advertising and marketing, questionable behaviors by some marketers and possible misperceptions of some watchdog groups lead consumers, sometimes correctly, to question marketers objectives and tactics.

In response to this, a group of executives, academics and students united in 2010 to cre-ate the Institute for Advertising Ethics (A5; http://adage.com/article?article_id=144288). The Institute conducts research on ethical and regulatory issues and raises awareness about the need for advertisers to regulate and monitor their behaviors and practices. A second activity will be to communicate examples of the extent advertisers will go to making sure they get the story right. Of course, this initiative isnt just about what American consum-ers think about advertisingthis is a worldwide issue. As well discuss in an upcoming chapter, marketing and advertising have increasingly gone global. Many of the companies youre familiar with and whose products you may use every day, have far flung operations. You can buy a Big Mac in St. Louis, Sydney and Shanghai and the Coca-Cola logo is said to be the most recognized symbol in the world. Thus any discussion of advertising and com-munication ethics needs to embrace and acknowledge the national and cultural differences that involve peoples values and mores.

Invasion of Consumer PrivacyAd Age looked at threats to privacy associated with behavioral targeting and what the FTC is considering as remedies (A6; http://adage.com/adnetworkexchangeguide10/article?article_id=143298).

Behavioral targeting uses the tracking of peoples website choices to build a profile of what they are most likely to buy, and then on websites that advertise, serve those people with ads for those products. As well see in detail in Chapter 6 on segmentation, this is ob-viously a plus for advertisers who can avoid wasting money delivering advertising to people




Ethical Challenges for Advertising 29

who would have no interest in their product. It can be argued that its a good thing for consumers, who instead of getting all kinds of irrelevant ads, get ads for products they are likely to be interested in. But when you think about the pattern of websites you have visited over the last month, it may be easy to see that that information might reflect characteristics youd rather not have known (of course, so might your Facebook page). Philosophers call privacy a contested commodity. The advertising industry considers using personal infor-mation as a way to provide valuable services to consumers. But that access is contested by ethical considerations of privacy. Regulators and advertisers are trying to figure out how to balance these contested commodity aspects of behavioral targeting.

Perhaps the best way to consider in detail the pros and cons of behavioral targeting is to look in detail at a particular example of what advertisers can find out about a per-son. Reporter Michael Bush gets the personal treatment, which he reports in My Life, Seen through the Eyes of Marketers (A7; http://adage.com/agencynews/article?article_id=143479). After reading about Michaels experience, does your evaluation of the ethical concerns of behavioral targeting change?

My Life, Seen Through the Eyes of MarketersAd Age Asks a Database Company to Profile Our Reporter, Revealing a Trove of Personal Informationand Plenty of Difficult Questions

A senior writer for Ad Age was shocked by the results when, as an experiment, he asked a major database firm to develop his own demographic and psychographic profile. De-mographics, as you may know, is information such as age, income, social class, race and gender. Psychographic segmentation focuses on lifestyle and personality factors.

Even though he is an advertising insider, the writer was very surprised at the profiles accuracy and how much they knew about him, his assets, and his behaviors. The com-pany used readily available information sources such as public records and census data, online shopping activities, catalog and retail purchase history.

He found that they had quickly ascertained his birthday, home phone, marital status, educational level and political party. They found detailed information about the price and current value of his home and the size of his mortgage and accurately estimated his income.

The psychographic profile was surprisingly correct as well, identifying him as health conscious, family-oriented, and an independent decision-maker. It also located his inter-ests in music, running, sports and computers and the types of sports and general infor-mation news he prefers.

Several issues related to ethics and convenience emerge from advertisers abilities to profile and target individuals with persuasive messages tailored just for them. First, many people including government regulators worry about invasion of privacy even if the data are used only for advertising and promotion. Others are concerned that such information could be used for sinister purposes. Second, many people are comfortable with compa-nies knowing this kind of information as long as it is used to target them with messages about product and services they are likely to want. They enjoy the convenience of learn-ing about sales and new items. Third, some people think that this type of profiling is fine, but the subjects of such profiling should be compensated by marketers for using their personal data.

Database companies and other advertisers say they arent linking information di-rectly to individuals. The article cites an executive at a big agency who says they keep consumer data secure saying their practices include the requirement that they never store personally identifiable information with customer behavior data. This means dont co-mingle name and address [and e-mail address] with other forms of data. In other



words, while they may segment you into certain consumer buckets they cant or wont identify you as an individual.

Most in the advertising business are well aware of the potential risks if consum-ers feel their privacy is being invaded and personal information is used inappropriately. Governmental officials are paying close attention to the matter and already a number of laws and regulations address online privacy issues. In addition, agencies know that if data-gathering practices cross the line where consumers believe they are harmed and not benefited by highly targeted messages, their brands could suffer.

Regulation and Self-Regulation of AdvertisingThe impact of various regulatory bodies on advertising is difficult to overestimate. Ad Age reviews ten important changes in the regulatory environment, starting with the Internal Revenue Service deciding in 1913 to let companies deduct the cost of advertising from their taxes (A8; http://adage.com/cmostrategy/article?article_id=142772). Although Congress has occasionally reconsidered having advertising be tax deductible, industry lob-bying has fought that change successfully. Notice that in the 1970s a number of the self-regulation organizations jointly formed the National Advertising Review Council, a move that many think strengthened advertising and probably improved the effectiveness of self-regulation. Advertising for pharmaceuticals and tobacco has proven controversial. The legal movement has been toward more freedom to advertise prescription drugs, but more and more restrictions have been placed on tobacco advertising.

Transparency about Brand Endorsements Advertising is considered unfair when consumers arent told that endorsements are paid for by advertisers (A9; http://adage.com/article?article_id=139595). In 2009, the FTC determined that endorsers had to actually use the product, bloggers who are paid to sing the praises of a brand must say that they are compensated, and even those who Twitter for a brand must identify whether they are paid. Most ethics discussions in advertising advo-cate for as complete transparency as possible. Thats also what the FTC will be looking for, as you will see in Ann Taylor Probe Shows FTC Keeping Close Eye on Blogging (A10; http://adage.coverleaf.com/advertisingage/20100503?pg=6#pg6).

Protection from Phone Call Harassment The Do Not Call program is also regulated by the FTC. The legal requirement for being able to directly contact people by phone is whether a company has an established busi-ness relationship with a consumer. But just what does that mean? If you sign up to re-ceive email from Target, you have an established relationship. But what if you participate in a contest or sweepstakes with Targetis that an established relationship? The answer is maybe (A11; http://adage.com/columns/article?article_id=143190).

Facilitating Positive BehaviorAlthough there is much in advertising to criticize, advertising campaigns have also been credited with saving Americans from catastrophe (A12; http://adage.com/article?article_id=143775). The See something, say something slogan of the New York Metropolitan Transit Authority has been running since 2003. It made a significant impact on the street vendor who alerted police to an SUV that turned out to be filled with bomb materials.




33

Theory about How Advertising Works5

CHAPTER

Pepsi lost the cola war. Thats the lead in a 2011 Ad Age article that describes how Pepsi products lost market share in its long-stand-ing rivalry with Coca Cola. Pepsi dropped its traditional advertising approach known in the industry as generation next. Both Pepsi and Coke compete in the same product categories and they face the same marketing and economic environment. Both are fierce competitors in the cola wars.

What caused Pepsis slide? Some observers think its largely related to a significant change in strategy that shifted budget allocations away from advertising including the Su-per Bowl and toward an innovative program called Pepsi Refresh.

In what some thought was a brilliant marketing maneuver, Pepsi promoted and distributed some $20 million in grants that consumers could apply for in support of worthy causes. They were supposed to be refreshing ideas that change the world

tapping into both social media and consumers social conscience. The connections between Pepsi and community causes were meant to strengthen relationships between consumers and the brand and benefit from significant publicity about the program and its good works.

Problems began to emerge: the Refresh Project received allegations of ap-plicants cheating or gaming the grants. In addition, the amount of exposure the brand received appeared to be insufficient. A former Pepsi executive said, The key learning for us was that in addition to having a cultural idea that taps into a mass sensibility, you need to make sure your idea is getting enough exposure to be successful.

Pepsi is expected to step up its marketing and likely take it in a somewhat differ-ent direction. Stay tunedthe cola wars are still raging (A1: http://adage.com/results?endeca=1&searchprop=AdAgeAll&return=endeca&search_offset=0&search_order_by=score&search_phrase=how+pepsi+blinked).

Nothing is as practical as a good theory.

Kurt Lewin, one of the foundational researchers in social psychology

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Additional Persuasion Theories 35

Each of the processing and management components needs to be evaluated when de-signing an advertising campaign. For example, sources need to be credible, attractive, and perceived as powerful or high status. Messages, the ads themselves, can appeal to some-ones appetite or desire for status. It can offer sex appeal or a range of other emotions. Ads can be short (15 seconds) or long (30 minutes). They can be for brands or public health promotions. The communication channel can be any mode of delivering the ad, including network television, banner ads on a website, and ads delivered to a mobile phone. Desire is often defined as an emotional response, such as liking something or feeling good.

As advertising professionals developed planning models, the hierarchy theory consis-tently contributed the basic idea of a matrix relating communication components to peoples responses. An early and still influential model made one of its first appearances in Adver-tising Age. Richard Vaughn of Foote, Cone & Belding (FCB) introduced the FCB grid. He suggested that products that require time and thought before the purchase are high involve-ment. He also suggested that whether people tend to decide on those products predominantly rationally or emotionally should drive advertising planning. High-involvement rational products (cars) involve a thinking approach. High-involvement emotional products (designer watches) involve a feeling approach. Low-involvement rational products (deter-gent) involve habitual processing, and low-involvement emotional products (lipstick) are reactive or impulsive purchases. Vaughn developed elaborate theories about what kinds of messages and channels should be used for each of the four types of products. (3)

Additional Persuasion TheoriesMany academic theories have appeared in the last forty years. A good overview of the most important of these theories can be found in Persuasion Theory (A2; http://adage.com/article?article_id=98959). Carl Hovland and his associates at Yale were concerned with how source characteristics such as credibility and expertise influenced people. Albert Bandura theorized it was important that media messages provide examples for people to imitate (for example, showing a woman who earns the attention of a handsome man by using a particular brand of shampoo). Classical conditioning from the early days of experimental psychology was employed to try to explain how people came to connect brands with reflexive responses (e.g., stimulating a hunger response when you watch a pizza commercial). In case youve for-gotten your psychology course, classical conditioning is exemplified by Pavlovs dog hearing a bell, getting meat powder injected into his mouth, followed by reflexive salivating. After a

Processing Communication Management Components Variables Source Message Channel Receiver

Message presentation

Attention

Comprehension

Desire

Retention

Behavior

We can then combine the management variables with the information processing stages in a persuasion matrix:



number of trials, the sound of the bell make the dog salivate even without the meat powder. The reflex is said to be conditioned to the bell. This is essentially a simple form of learning.

The Elaboration Likelihood Model (ELM) identified attention to advertising mes-sages as being centrally processed (lots of attention paid to the verbal part of the ads) and peripherally processed (liking the looks of the model or the sounds of the music in the background). All of these theories have been applied extensively in trying to understand how advertising works and to plan an effective strategy for an advertising campaign.

The hierarchical theories of advertising and many of those described in Persuasion Theory emphasized the thinking or rational consumer who carefully considered attributes of brands and then made a decision. For the rational consumer an advertisement is infor-mative. But with Vaughns model, conditioning theories, and the ELM, it became clear that emotion was often a more important marker for the success of an ad than any measure of rational processing. Academic researchers found that liking an advertisement itself (rather than just the brand) was the strongest predictor of how well the ad would sell product. Advertising Age reviewed the history of the use of recallthe measurement of how many people remembered the ad the day after it ran (A3; http://adage.com/article?article_id=98847). Advertising Age also told the story of yet another advertising agency that found that how much people liked ads is a better predictor of sales than how well they were recalled (A4; http://adage.com/article?article_id=49312).

Ad Age importantly offered explanations for why emotional advertising is so effective (A5; http://adage.com/article?article_id=120017).

The danger in ad recall testsOne of the most persistent research streams in advertising has been unaided recall or how well a viewer or reader remembers the brand and message in an advertising message. This was thought to be a reasonably good predictor of the likelihood a consumer would make a purchase. But a team of advertising researchers shared a mistrust in the effectiveness of recall measure and hypothesized that the role of emotion in ads was a powerful predictor of purchase. They further suggested that a strong linkage between liking and emotion were crucial motivators of consumers and the recall missed the emotional elements in ads.

Their research found that advertising that triggered episodic memory or stories that featured the consumer and the brand were emotion driven and thus were able to forge powerful relationships between the consumer and the product.

The researchers argued that their findings showed that advertising research could help advertising strategists and creative teams to develop more effective advertising. Acknowledging that decoding the emotional impact of advertising on purchases is difficult and complex, they advocate continuing efforts to understand how we process persuasive messages and where emotions rule.

The article also develops another kind of persuasion matrix that suggests the kinds of responses people have to combinations of emotions. If an ad creates both happiness and sadness, the results are feelings of yearning and nostalgia. In fact, scholarly research has shown that the combinations of feelings, specifically nostalgia, have particularly high im-pact on consumers. (2)

Another particularly powerful emotion is humor. Whether its Spuds MacKenzie or Real Men of Genius, Bud Light commercials for years have successfully used humor to sell the beer. Eventually, they cornered an amazing 20 percent of the American beer mar-ket. In 2008, however, the company abandoned humor and focused instead on drinkabil-ity. Advertising Age reported that when the brand abandoned humor, it lost a good chunk

36 CHAPTER 5 Theory about How Advertising Works



Fiber One 37

of its sales (A6; http://adage.com/article?article_id=138371). Advertising Age also took a more theoretical look at how humor operates in consumer information processing. It drives attention to advertising, makes it more enjoyable over many repetitions, and when ads integrate the brand with the humor, solidifies brand image (A7; http://adage.com/article?article_id=56992).

BOOK EXCERPT: Make Em Laugh, Make Em BuySurprisingly, humor in advertising is a problem. Authors Max Sutherland and Alice K. Sylvester in Advertising & the Mind of the Consumer, offer a brief history of advertising and point out that historically, humor has often been seen as brutal, derisive, and crude.

While our attitudes toward humor have changed a lot, advertisers know that while it can be effective, it can also be a two-edged sword that can damage brands more than enhance them.

Humor often emerges from the unexpected or incongruity. Think of your favorite jokes: they usually take you in one direction and then surprise you with a change. We dont expect babies to talk about investments, but when the E-trade baby talks about his stock trading schemes, the incongruity makes us laugh and gets our attention.

Is humor in ads persuasive? Well, that depends. Sometimes humor distracts us and we dont remember the brand commercial that made us laugh. On the plus side, humor often results in less counter-arguing. We engage with the funny message and dont try to rationally counter it as we might with a more serious ad. In addition, people like funny ads and there seems to be a linking between liking brands and buying the brands prod-ucts. Importantly, people notice humorous ads, gaining more attention than serious spots.

The authors argue that for humorous ads to be effective, they must be integrated into the brand message and woven into the story line else the product is likely to be forgotten.

Of course, advertisers also need to be aware that their attempts at humor can backfirethat which I find funny and quirky, you may find offensive and crude. The punch line? We still dont know enough about effects of humor in advertising, but theoretically driven research studies are getting us closer to understanding how it may work in the purchase process.

Fiber OneAs we now better understand the theory of how humor works, lets think about another product. How might we build an effective advertising campaign for Fiber One, a cereal that is supposed to be good for you, but which many people think tastes like cardboard.

Can we make humor work for us? Fiber cereal doesnt seem like a naturally funny topic, but given the power of emotion to guide attention to a low-involvement product, a humorous ad could help break through the clutter. The humor should not be built on any stereotypes. Check out Ad Ages report to see if you agree that the brands use of humor works (A8; http://adage.com/bigtent/post?article_id=144809). The grocery store manager is an Asian American actor Ajay Mehta. In his conversation with a young woman who is sampling Fiber One, he responds to each of her comments before she makes them. She starts to say it cant have half a days fiber, but he beats her to it. Mehta tells her he doesnt have ESP. She says, OK, Ill take a box and then stops momentarily and then you probably already knew that. The humor and surprise of this store man-agers predicting everything the woman says is pleasant but still drives home the selling point: Even though Fiber One has half the fiber you need every day, it doesnt taste like cardboardits delicious. This is a textbook example of combining emotion with a sell-ing proposition.

Copyright 2011 Cengage Learning. All Righ

Documents

Advertising Age_ the Principles of Advertising and MarkCommunication at Work - Esther Thorson & Margaret Duffy